In this country, minorities don't truly "exist" in the minds of many until they become an advertising target.

While several film and music companies began to seek out gay buyers during early liberation in the late 1970s and">

 
On-Campus
Exhibits
Industry
About AEF | Newsletter | Site Map | Legal | Advanced Search
 
Print Version

The Gay Community: From Invisible Market to a 'Dream Market' and Beyond


In this country, minorities don't truly "exist" in the minds of many until they become an advertising target.

While several film and music companies began to seek out gay buyers during early liberation in the late 1970s and 1980s, AIDS fears quickly swept away initial corporate interest for another decade. The lesbian and gay community finally began to "exist" as a market when political winds started to slowly shift taboo from the group in the 1990s.

Today, more and more companies are taking an interest in the gay community, often by virtue of active employee groups, but corporate presence is like a crowded Olympic-sized wading pool -- very wide but very shallow. Many today are willing to stick their toes in but few are willing to spend much money on the idea to wade in more deeply.

Aside from the state of the current economy, a major problem has endured: a lack of solid research, with few willing to pay for it.

Dubbed 'A Dream Market,' but Reliable Data Remains Elusive

Due to political sensitivities no one had ever researched gay people, so it remained unknown exactly how many there were, how much money they made or what they did with it. The U.S. Census to this day has never asked people about their sexual identity, and the best answer to the community's size had long been the 1950s Kinsey study of sexuality, which indicated perhaps 10% of the population is gay.

No government agency or marketer wanted to spend the money to find out, but the question was later introduced by other studies, finding the gay community's size in the range of 6%-10% of the general population (or 12.5 million to 21 million adults over 18). One of the challenges for demographers, pollsters and marketers was to sort out the differences between identity and behavior to classify a gay person, what questions to ask and how they're asked. Is it someone who calls themselves gay? Do bisexuals count? Do you include closeted persons too fearful to answer the question? Can you call someone or show up at their door and ask if they're gay?

Out of desire for more ad dollars, the top 10 gay newspapers in 1988 formed an alliance to pay for a study of their own readers by the well regarded Simmons Market Research Bureau. The statistics that came back were impressive and provided the first hard facts on the market anywhere, showing above average incomes and education. A breakthrough article in the Wall Street Journal (Overcoming a Deep-Rooted Reluctance, More Firms Advertise to the Gay Community, July 18, 1991) cited some of those statistics and called the gay community "a dream market" and corporations slowly started to pay attention. But the small study of gay paper readers was suddenly, and incorrectly, considered representative of the entire gay community.

Shortly thereafter, now-defunct Chicago gay marketing group Overlooked Opinions reported in 1992 that the American gay market was worth $514 billion, gay households annually earned $52,624 (41% above the national average) and lesbian households $42,755 (26% above national average). However, its statistics were later widely discredited for the same reason the Simmons gay paper study could not be applied to all -- it used a small biased sample that could not properly represent the whole market.

Yet in a vacuum of better information, the concept of gay wealth took hold and those numbers still remain in use even today by less savvy gay marketers and publications.

Politics Still Cloud the Issue as Advertisers Step In Anyway

In 1992 OUT magazine made its debut intending to win over advertisers by leaving out sexual content, a highly successful approach. By eliminating the sexually oriented ads that had been an important source of income to previous publications, OUT was able to land major brands into the market for the first time, such as Banana Republic, Sony and American Express. In more recent years, the explosion of the internet brought millions of gays online to web sites like PlanetOut.com and gay.com, attracting more advertisers in financial services, travel and personal products areas including behemoth Procter & Gamble.

As the gay market appeared to be gaining steam, others began to study the market. Simmons decided in 1997 it would return to make its own general market study to sell.

And in October 2001, OpusComm Group, in conjunction with the S.I. Newhouse School at Syracuse University, released the "2001 Gay/Lesbian Consumer Online Census" of 6,300 mostly U.S. respondents, the largest survey yet. But once again, both studies' methodology were attacked for not being scientifically representative.

Critics pointed to biased samples that were not truly representative of the whole gay population. Overlooked Opinions' and Simmons' surveys both relied on lists of persons who had bought from catalogs or donated money to causes -- already displaying disposable income and skewing the data. The OpusComm/Syracuse online study was criticized for a lack of random sampling and for a lack of balancing against the general population.

By contrast, a 1998 academic report by University of Massachusetts professor Lee Badgett found that gay male earnings may actually be 4 percent to 27 percent less than heterosexual men.

U.S. Census Finds Same-Sex Couples In Every County, Totaling 600,000

Perhaps the most compelling new information about the gay market is coming from American census data for 2000. It found approximately 600,000 same-sex couples (representing 1.2 million individuals) across the U.S., with at least one pairing in almost every county, and data backing what has previously been anecdotal information: that gay male couples largely prefer urban environments and lesbian couples settle more often in rural and suburban locales.

Over the years, a handful of companies have invested in proprietary research which has resulted in long-term commitments and more quantifiable results, including American Express, Subaru of America, Miller Lite and IBM. In the early 1990s, American Express introduced its Cheques for Two product, uniquely appropriate for same-sex couples who do not share names, and later rolled out advertising for its Financial Services and green card divisions as well. Subaru took a close look at its consumers and discovered a loyal lesbian following, which it embraced eight years ago.

For greater success within the gay market, companies should follow their tried-and-true approaches: rely on good research before, during and after campaigns to find out what their brand equity is in the market, what the state of their category is, and how to make the best approach. They must realize that they will get what they pay for if they invest little and simply go on "gut" feelings.

As the gay community continues to be embraced by the mainstream and media companies such as Viacom explore launching a 24-hour gay cable network, the opportunities to reach gays and lesbians are expanding rapidly. Will advertisers and their budgets be ready?

To view information on gay symbols, click here.


Michael Wilke has written about the ad industry for over a decade at Advertising Age, Inside Media and his work has also appeared in The New York Times, Brandweek and The Advocate. He is now Executive Director of the Commercial Closet Association, a unique non-profit advertising education and journalism organization that is a global resource on gay representation in advertising.

 

Michael Wilke, July 25, 2002

Copyright © 2002 AEF. All rights reserved.